AI1128 Economics of the Built Environment 7.5 credits


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Course information

Content and learning outcomes

Course contents *

The course covers the following areas:

1. Microeconomics: price formation on competitive markets and monopoly markets, different regulations and their effects with a special focus on the housing market and a sustainable society. The basis of contract theory with applications to procurement contracts.

2. Macroeconomics with a focus on property cycles and how these are related to the general business cycle and macroeconomic policies.

3. Cost calculations, investment calculations and how these can be used for analysis of projects and valuation of properties.

4. The core of an annual report, e.g., balance sheet and income statement.

Intended learning outcomes *

After the course the student should be able to:

  • present the principles behind how a market works
  • analyze the effects from various changes on a market on prices and quantities produced
  • understand the background of market failures and their implications
  • explain the basics of environmental economics and how economic policy instruments may be used for a sustainable society
  • critically evaluate arguments for and against various regulations on a market
  • understand how different forms of contracts, e.g. in procurement affects the incentive of the parties
  • understand why certain macroeconomic policies are introduced, e.g. when the central bank changes the interest rate
  • evaluate the general effects of different macroeconomic changes on the real estate and construction market
  • understand the mechanisms that can lead to changes in construction volumes and property prices
  • explain the basic fundamentals behind cost- / benefit-analysis for, e.g., infrastructure investments
  • critically analyze assumptions in such calculations
  • interpret the annual financial statements for real estate companies

Course Disposition

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Literature and preparations

Specific prerequisites *

Introduction to the Planning and Building Process (AI1137) or equivalent course.

Recommended prerequisites

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Examination and completion

Grading scale *

A, B, C, D, E, FX, F

Examination *

  • SEMN - Seminars, 1.5 credits, Grading scale: P, F
  • TENA - Examination, 6.0 credits, Grading scale: A, B, C, D, E, FX, F

Based on recommendation from KTH’s coordinator for disabilities, the examiner will decide how to adapt an examination for students with documented disability.

The examiner may apply another examination format when re-examining individual students.

Allowed during the exam: a calculator and a Swedish-XXX dictionary.

Opportunity to complete the requirements via supplementary examination

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Opportunity to raise an approved grade via renewed examination

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Fredrik Armerin

Further information

Course web

Further information about the course can be found on the Course web at the link below. Information on the Course web will later be moved to this site.

Course web AI1128

Offered by

ABE/Building and Real Estate Economics

Main field of study *


Education cycle *

First cycle

Add-on studies

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Ethical approach *

  • All members of a group are responsible for the group's work.
  • In any assessment, every student shall honestly disclose any help received and sources used.
  • In an oral assessment, every student shall be able to present and answer questions about the entire assignment and solution.